European consumer prices hit highest level in over 13 years
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29/10/2021 | 12:48 PM By Pan Pylas key5825 Associated Press
Consumer prices across the 19 European Union countries that use the euro have key5827 risen to the highest level in more than 13 years, thanks to soaring energy prices and pent-up demand during the pandemic recovery.
Eurostat, the European Union’s statistics agency, said inflation across the bloc rose to 4.1% key5822 in the year to October, up from September’s equivalent rate of key5835 3.4%.
The increase was the highest since July 2008, when inflation was also 4.1%.
Inflation in the 19 countries has been rising as the global economy rebounds from the coronavirus pandemic.
The recovery has not been normal, with businesses and consumers worldwide feeling the pinch of supply chain back-ups and labour key5832 shortages.
But the most dramatic effect on prices from lockdown restrictions easing and global demand picking up has been soaring energy costs, which key5821 have raised utility bills and threatened the economic recovery.
AdvertisementThe latest rise in consumer prices is likely to put pressure on the European Central Bank to accelerate moves to end its pandemic stimulus measures, with inflation running at double its target of 2%.
Central banks usually raise key5829 interest rates and dial back key5831 key5826 stimulus efforts to combat rising prices, but they sometimes hold off if they think it’s linked to temporary factors.
The European Central Bank said on Thursday
https://www.breitling.to/ that much of the surge in prices is tied to comparisons with low prices during the pandemic, recently key5824 higher fuel costs and demand outpacing supply as the key5834 economy reopens.
As bank officials said they expected all three to be temporary, they kept their pandemic key5823 support, including a 1.85 trillion euro (£1.55 trillion) bond purchase programme, in place until March.
“We agree with key5830 the ECB that the forces pushing inflation up should fade next year,” said key5828 Jack Allen-Reynolds, senior key5833 Europe economist at Capital Economics.
“But given the uncertainty around how long supply problems will persist, the risks are clearly skewed towards a longer-lasting overshoot of 2%.”
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